Niger Delta Exploration & Production Plc (NDEP), Nigeria’s first integrated oil and gas Investment Company, has acquired about 14 percent equity stake in Consolidated Hallmark Insurance at 124 percent premium on the insurer’s traded closing price of 29 kobo as at Friday, Feb. 1.
The acquisition by the indigenous oil company is seen to avert foreseen merger and acquisition in the insurance sector and cause a modification in the insurance company’s Board which currently has Eddie Efekoha as its Chief Executive.
The consolidation was projected as the National Insurance Commission (NAICOM) raised insurance firms’ minimum capital base in the country from N5 billion to N15 billion in 2018 in a bid to categorise insurers into tiers as obtained in the banking sector.
However, the commission cancelled the tier based solvency capital recapitalisation of the underwriting sector late last year.
The deal, which saw the oil firm buying 1.13 billion ordinary shares of 50 kobo each of Consolidated Hallmark Insurance at 65 kobo per share through private placement, was finally completed Tuesday as the Nigerian Stock Exchange (NSE) listed the secondary offering worth N734.5 million on its daily official list.
With this listing of the additional 1.13 billion ordinary shares, the total issued and fully paid up shares of Consolidated Hallmark has now increased from 7 billion to 8.13 billion ordinary shares of 50 kobo each, the NSE said in a notice to dealing members.
Two years ago, the insurance company offered 1 billion ordinary shares of 50 kobo each at 50 kobo per share on the basis of one new ordinary share for every six ordinary shares of 50 kobo held as of August 28, 2017, in a rights issue.
Shares of Consolidated Hallmark gained 6.9 percent on the floor of the Nigerian Stock Exchange (NSE) to close at 31 kobo after the close of trade Tuesday.
The insurance company’s results for the nine months to September 2018 show gross premium income rose by 19.64 percent to N5.4 billion from N4.52 billion in the same period a year earlier.
Underwriting profit grew 13.3 percent to N948.3 million from N836.00 million, while profit for the year also increased by 71.23 percent N355.92 million as against N207.86 million recorded in the previous year.
Consolidated Hallmark was listed on the NSE almost eleven years ago, it offers a wide range of insurance products and services.
NDEP, on the other hand, is publicly quoted company on the NASD OTC Securities Exchange with over 700 shareholders from every geo-political zone in the country.
The oil firm was incorporated on March 25, 1992 as the Midas Drilling Fund, but it assumed its current name in November 1996 with a vision to create a vehicle that would afford ordinary Nigerians the opportunity to participate in and benefit from the country’s oil and gas industry.
OLUWASEGUN OLAKOYENIKAN
